American Airlines 2006 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2006 American Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 113

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113

81
13. Earnings (Loss) Per Share
The following table sets forth the computation of basic and diluted earnings (loss) per share (in millions, except
per share amounts):
Year Ended December 31,
2006 2005 2004
Numerator:
Net earnings (loss) – numerator for basic
earnings (loss) per share
$ 231
$ (857)
$ (751)
Interest on senior convertible notes 27 - -
Net earnings (loss) adjusted for interest on
senior convertible notes – numerator for
diluted earnings per share
$ 258
$ (857)
$ (751)
Denominator:
Denominator for basic earnings (loss) per
share – weighted average shares
205
165
161
Effect of dilutive securities:
Senior convertible notes 32 - -
Employee options and shares 44 - -
Assumed treasury shares purchased (17) - -
Diluted potential common shares
Denominator for diluted earnings loss per
share – weighted-average shares
264
165
161
Basic earnings (loss) per share $ 1.13 $ (5.18) $ (4.68)
Diluted earnings (loss) per share $ 0.98 $ (5.18) $ (4.68)
For the year ended December 31, 2006, approximately 10 million shares related to employee stock options were
not added to the denominator because the options’ exercise prices were greater than the average market price of
the common shares. Approximately 78 million and 52 million shares issuable upon conversion of the Company’s
convertible notes, employee stock options and deferred stock were not added to the denominator for the years
ended December 31, 2005 and 2004, respectively, because inclusion of such shares would be antidilutive.
14. Segment Reporting
The Company's operations of American and AMR Eagle are treated as an integrated route network and the route
scheduling system maximizes the operating results of the Company. The Company's chief operating decision
maker makes resource allocation decisions to maximize the Company's consolidated financial results. Based on
the way the Company treats the network and the manner in which resource allocation decisions are made, the
Company has only one operating segment for financial reporting purposes consisting of the operations of
American and AMR Eagle.
American is the largest scheduled passenger airline in the world. At the end of 2006, American provided
scheduled jet service to approximately 150 destinations throughout North America, the Caribbean, Latin America,
Europe and Asia. American is also one of the largest scheduled air freight carriers in the world, providing a full
range of freight and mail services to shippers throughout its system. AMR Eagle owns two regional airlines,
which do business as "American Eagle” - American Eagle Airlines, Inc. and Executive Airlines, Inc. The American
Eagle® carriers provide connecting service from eight of American's high-traffic cities to smaller markets
throughout the United States, Canada, Mexico and the Caribbean.